Charlie
Colgan doesn't do predictions - he does forecasts. He deals in a world
of ever-incomplete statistics and uncontrollable group psychology, and
is respectful of the need to get it as right as possible.

"The
first principle of forecasting is: Those who live by the crystal ball
are condemned to eat glass," he says to prove the point.

That
does not mean at all that accuracy is beyond reach. A recent "very short-term"
forecast of holiday traffic on the Turnpike - very short-term being Monday
for Friday of the same week - was 3 percent off, but did have the direction
right (it was up, not down). "We can do better," Colgan says.

Charles
S. Colgan, Colby B.A. '71 and U.Maine Ph.D. '92, will once again bring
his highly popular economic forecast to the USM Corporate Partners Business
Before Hours Breakfast Jan. 9 at the Abromson Community Education Center
.

The
annual January introduction of Colgan's view of the prospects for the
year, variously called "The 2008 State of Maine Economic Forecast " and
"Breakfast with Charlie," drew 400 listeners for last year's edition.

The
word will be fresh

No
advance word on the 2008 forecast was available when the interview was
done in mid-December. "I don't know yet what I'm going to say," Colgan
declared, referring to the volatility of the economic picture - much of
it related to the troubles in the mortgage market and consumer uncertainty.

Uncertainty
in December by no means threatens the prospects for a useful and entertaining
presentation in January, because Colgan has linkages to a variety of information
sources, as well as an effective process for determining the most that
can be concluded from what can be known at any particular time. The content
will be up to the day, and the eye on the trends that control the analysis
will be the same.

Colgan
teaches economics, policy analysis, economic development and analytic
methods at USM's Muskie School of Public Policy.

He
also is associate director of the Maine Center for Business and Economic
Research at USM and the university system's Center for Tourism Research
and Outreach. He is a research fellow for the U.S. Bureau of Labor Statistics,
chief economist for the National Ocean Economics Program and chair of
the state Consensus Economic Forecasting Commission.

And
he is a former economist for the state, among other things. All of those
connections include access to data and analytical records, as well as
their contractual relationships with the big national forecasting organizations.

How
do they do it?

How
does the economist see his job?

"Our
job in forecasting is to develop a picture of the future that (our clients)
can use to make their own picture of the future," according to Colgan.
"I want to tell them what I see, and provide them with good information
on what I came up with and how I came up with it."

A
summer weekend Turnpike traffic forecast, for example, starts with gasoline
prices, weather forecasts and other trends of that particular summer.
"We pull these things together and have the data and expertise" to derive
reasonably dependable expectations.

The
information can work in ways mysterious to the uninitiated. While gasoline
price increases tend to have a negative impact on tourism in Maine , crude
oil prices are opposite. That's because gasoline increases discourage
day trippers - a big category of Maine visitors -- while news of crude
oil price hikes cause people to postpone longer trips in favor of short
ones.

In
Maine , different holidays have different effects. Labor Day and July
4 are favored by longer-time vacationers, while Memorial Day and Columbus
day attract short vacationers.

"We're
able to gather information and do analyses that people can't do by reading
the newspaper," Colgan notes. The source material is always different,
and finding and tracking it is a true specialty.

Some
economic research is on a much more massive scale than that of holiday
traffic forecasting.

The
huge Plum Creek development project in the North Woods near Moosehead
Lake is one of the most complicated Colgan has worked on. The struggle
over the size, nature and location of the multifaceted development produced
such changed proposals that there were four entirely different economic
forecasts

Similarly,
the 25-year plan of the State Department of Transportation plan for highways,
public transit and ports and rail was the centerpiece of a process in
which various economic scenarios were used to help the Legislature revise
its own investment decisions.

It's
come a long way . . . Still does

Technology
has dramatically improved the range, depth and immediacy of today's economic
work, Colgan says. "In 1982, when I did my first forecast with the State
Planning Office, the forecasting model was in Fortran. It ran on tape,
and we had to manipulate it with punch cards.

"We
could do just one forecast a day. We could only use the computer at 3
a.m., and do that one forecast. We had to wait. Now we can get together
and do instant forecasts on our laptops. I have four software products
I use to do forecasting."

The
annual forecast that draws so much attention each January is on the shorter
side of those Colgan is involved with, although it, like the holiday ones,
is based on study of broad and deep trends. The annual forecast has been
produced for more than 10 years.

The
Maine Consensus Economic Forecasting Commission, made up of five people
(including Colgan) appointed by the governor and the Legislature, produces
four forecasts a year for the state to use in estimating revenue.

That
is one of Colgan's sources for his annual presentation at the Corporate
Partners Breakfast. Another source for that forecast is the New England
Economic Partnership, a 35-year-old public-private consortium.

Intermediate-range
forecasts go out five years, and those like the Plum Creek work aim 15
to 20 years into the future.

See
you there

Economics
has been referred to as "the dismal science," to some extent because of
its penchant for embarrassing its practitioners. For his part, Charlie
Colgan has been known to acknowledge last year's misses as he serves up
a new set of ideas about the upcoming year's Maine economy.

Still,
he's been at it long enough that, as he notes, "Nothing surprises me any
more." And somehow, whether he's ever had to savor the flavor of busted
crystal ball on the half-shell, his January show has been anything but
dismal.

So
the forecast for January 9 is for another record crowd and another program
as entertaining as it is substantive in business value. See you there.

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